The Brazilian president, Luiz Inácio Lula da Silvacriticized the central bank this Tuesday, saying that its boss, Roberto Campos Neto, was harming the largest economy in Latin America, while pointing out that will appoint a replacement who will not be carried away by market nervousness.
The Brazilian president, who is in his third non-consecutive term as president, argued that the behavior of the central bank is the only thing “out of place” in Brazil at this time and that the interest rate cannot be “prohibitive” for the productive sectors.
“The president of the central bank does not show the capacity for autonomy, he has a political side and, in my opinion, he works much more to harm the country than to help it,” Lula said in an interview with local CBN radio.
Brazil’s central bank will stop lowering rates
The central bank, at its meetings on Tuesday and Wednesday, is widely expected to stop its easing cycle amid increased volatility in domestic financial markets and unanchored inflation expectations.
Authorities cut the benchmark Selic interest rate in May by 25 basis points to 10.50%, following six cuts twice that magnitude since August last year.
Campos Neto, appointed to lead the monetary authority in 2019 by the government of the then president Jair Bolsonaro, has been the target of Lula’s criticism since he came to power last year. Campos Neto’s term ends at the end of this year.
Lula said he plans to appoint to the position “a mature, experienced and responsible person, who respects the position he or she occupies and does not give in to market pressures”adding that Brazil’s need to control inflation and its commitment to growth will be key to deciding monetary policy.
